Tax In Ghana

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Ghana is complying with the country’s tax system. As well as paying tax in Ghana, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Ghana under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Ghana for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Ghana, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Ghana through PAYE is left with the prospect of doing everything themselves.

Do you know much about Ghanaian Tax Law? Does Ghana have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Ghana can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Ghana, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Ghana are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Ghana umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Ghana taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Ghana tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Ghana, many of whom are experts in tax and immigration laws. If you have any questions about tax in Ghana, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Ghana work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Ghana but without the overhead of directly dealing with the Ghana tax authorities. Get in touch with us today for some reliable advice on tax in Ghana!

 

When Do You Need to Lodge Your Tax Return?:
The tax year is the Calendar year (31 December). Tax returns may be filed after the tax year ends.
Tax Filing Deadline :
30 April
Can you file it online? :
Yes, https://egovonline.gegov.gov.gh/EghanaWeb/GRAHome/eghana.portal
Currency:
Ghanaian Cedi (GHS)
Tax-free Threshold in:
GHS 2,592
Grossed Income:
Up to GHS 2,592
Tax Rate:
0%
Grossed Income:
From 2,593 to 3,888
Tax Rate:
5%
Grossed Income:
From 3,889 to 5,700
Tax Rate:
10%
Grossed Income:
From 5,701 to 38,880
Tax Rate:
17.5%
Grossed Income:
Above 38,880
Tax Rate:
25%
How long does it take to set up:
14 days
How much does it cost:
GHC 445 + 0.5% of the stated capital as commencement tax.
Is it easy? :
Starting a Business Rank: 110 https://www.doingbusiness.org/data/exploreeconomies/ghana
How to File Taxes in:

Employers are required to file returns on behalf of employees within 3 months after the end of the tax year. If the employees and the Commissioner General agree, the returns filed by the employers will be the final return. All employees with more than one employment income must file a tax return at the end of the year.

The process of filing personal income taxes in Ghana involves:

Step 1: Register for a tax identification number. To do this, first register for temporary credentials here(link is external) by filling out your details. You will need either your national identity authority (NIA) OR Drivers License (DVLA) OR Voters Card (EC). After completing the form, you will receive an email link to register for the TIN.

Step 2: Click the link in the email and log in using your temporary credentials. Complete and submit the form to the GRA to receive your TIN.

Step 3: Log in(link is external) with your TIN and password.

Step 4: After you log in, click the “submission” tab and then click “return”.

Step 5: Enter the “Doc Type” that you would like to file a return for. For personal income tax, choose “Personal Income Tax Final”.

Step 6: Fill out the PIT form and click “Submit”.

  • Note that failure to submit a tax return by the deadline attracts a penalty of GHC500 and an additional GHC10 for each late date.

Step 7: Any tax due can be paid via the eTax portal(link is external) or at your bank with a completed pay-in slip(link is external).

Additional information:

Notes:

The table above represents the progressive rates of income tax applicable to resident individuals.

Non-residents are subject to a flat rate of 20%.

 

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

You are a tax resident in Ghana if you meet any of the following:

  • A citizen of Ghana excluding citizens who have a permanent home outside Ghana and lived in that home for the whole year of assessment.
  • An individual who is present in Ghana for at least 183 days in the year of assessment.
  • An employee or official of the government of Ghana posted abroad during the year of assessment
  • A citizen with a permanent home in Ghana who is temporarily absent from Ghana for no longer than 365 successive days.
Am I taxed on my global income in:

Yes if you are a resident. However, the employment income of a resident individual from employment exercised in a foreign country is exempt if the employment is exercised with either:

  • A nonresident employer
  • A resident employer if the individual is present in the foreign country for 183 continuous days or more during the year of assessment.

Non-residents are Ghanaian-source income only.

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